20251230Final_Order_No_36889.pdf

Office of the Secretary
Service Date
December 30,2025
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION ) CASE NO. INT-G-25-02
OF INTERMOUNTAIN GAS COMPANY )
FOR AUTHORITY TO INCREASE ITS )
RATES AND CHARGES FOR GAS SERVICE ) ORDER NO. 36889
IN THE STATE OF IDAHO )
On May 30, 2025, Intermountain Gas Company("Company") applied to the Idaho Public
Utilities Commission ("Commission") requesting authority to increase its rates and charges for
natural gas service in the state of Idaho ("Application").
On June 13, 2025, the Commission issued a Notice of Application, Notice of Suspension
of Proposed Effective Date, and Notice of Intervention Deadline. Order No. 36639. The
Commission granted intervention to Alliance of Western Energy Consumers ("AWEC") and
Micron Technology, Inc. ("Micron") (collectively, "Intervenors"). Order Nos. 36654, 36676. On
July 22, 2025, the Commission issued a Notice of Parties. On August 19, 2025, the Commission
issued a Notice of Schedule, Notice of Virtual Public Workshop, Notice of Customer Hearing,
Notice of Public Comment Deadline, and Notice of Technical Hearing. Order No. 36723.
On September 4 and 5, 2025, Commission Staff ("Staff'), the Company, and both
Intervenors (collectively, the "Parties") participated in a settlement conference. On October 20,
2025, the Company filed a Stipulation and Settlement ("Proposed Settlement") and a Motion for
Approval of Stipulation and Settlement ("Motion"). The Proposed Settlement was signed by the
Parties.
On October 30, 2025, the Commission issued a Notice of Proposed Settlement, Notice of
Amended Schedule, Notice of Customer Hearing, Notice of Technical Hearing, and Notice of
Public Comment Deadline. Order No. 36824. On November 13, 2025, the Commission held a
customer hearing in Boise. On November 18, 2025, the Commission held a technical hearing in
Boise during which the Commission heard testimony from the Parties.
Having reviewed the record, we now issue this Order approving the Proposed Settlement
with the modification described herein.
THE APPLICATION
The Company initially requested an increase in its collected revenue of approximately
$26.5 million, which represented a 22.2% increase in marginal revenue, or an overall revenue
ORDER NO. 36889 1

increase of 8.6%, and a 7.86% rate of return. Application at 3. The Company represented that its
present rate of return is approximately 4.45%,based on a test year ending December 31, 2024. Id.
The Company stated that it is seeking additional revenue to recover increased operating expenses
and costs associated with plant additions, as well as revenues necessary to produce a fair rate of
return.Id.
According to the Company, if the Application was approved as filed, the average
residential customer's bill would increase by $4.69 per month, or 11.46%, and the average
commercial customer's bill would increase by $9.26 per month, or 5.16%. Kivisto Direct at 16.
The Company explained that its proposed rate design was intended to move towards cost-based
rates for customer classes, as determined by the Company's class cost of service study. Id.
TERMS OF PROPOSED SETTLEMENT
Under the Proposed Settlement, the Company's authorized revenue requirement would
increase by $13 million, reflecting an increase of approximately 10.4% in margin revenue.
Proposed Settlement at 2. The components of the revenue requirement include: (1) a 9.5%Return
on Equity; (2) a cost of debt of 4.956% with a debt-to-equity ratio of 50% equity and 50% debt,
resulting in an overall rate of return of 7.23% on the total cost of capital; and (3) a total rate base
of$524,773,059.Id. at 3.
The Proposed Settlement includes an updated rate spread among customer classes. Id. If
approved as filed, the Proposed Settlement would result in the average residential customer's bill
increasing by $2.45 per month, or 6.02%, and the average general service commercial customer's
bill would increase by $4.42 per month, or 2.46%. Exhibit 2 to Settlement Agreement. The
Proposed Settlement also includes an increase in the monthly residential customer charge to
$11.00; an increase in the monthly general service customer charge to $23.00; and an increase in
the monthly T-4 Transport Firm customer charge to$275.00.Proposed Settlement at 3. The Parties
agreed that the customer charge for all remaining classes would be as filed in the Company's
Application.Id.
Under the terms of the Proposed Settlement, the Company and Staff agreed to hold
workshops before the Company files its next general rate case to discuss: (1) a process to ensure
Company customers are insulated from the costs of renewable natural gas projects; (2) issues
concerning separation of project costs and Company betterment costs associated with mainline
extensions; and(3)the components of the Company's cost of service study and related matters.Id.
ORDER NO. 36889 2

at 4-5. Additionally, the Company and Staff agreed to meet to discuss the adequacy of notices
provided to paperless billing customers.Id. at 6.
PARTY TESTIMONY
A. Staff Testimony
Staff witness Travis Culbertson testified that Staff conducted a comprehensive review of
the Company's Application, a thorough audit of the Company's workpapers and records, an
analysis of the Company's class cost of service study, and extensive negotiations with the Parties
to the case. Tr. vol. I, 48. Mr. Culbertson testified that Staff believed that the Proposed Settlement
offered a reasonable balance between the Company's opportunity to earn a reasonable return on
its investment and affordable rates for customers. Id. Mr. Culbertson testified that Staff believed
the Proposed Settlement struck a balance between providing rate stability and maintaining the
financial viability of the Company. Id. at 56. According to Mr. Culbertson, Staff thought the
Proposed Settlement was in the public interest; was fair, just, and reasonable; and should be
approved by the Commission. Id. at 48.
B. Company Testimony
Company witness Travis Jacobson testified that the Parties to the Proposed Settlement
represent a wide range of interests with the Company's customer base. Id. at 13-15. He further
testified that the Proposed Settlement reflected a reasonable compromise of the Parties' various
positions, reached following an extensive discovery process, ensuring the Proposed Settlement
was based on all relevant information. Id. at 15. For these reasons, Mr. Jacobson requested the
Commission approve the Proposed Settlement without change.Id.
C. AWEC Testimony
AWEC witness Bradley Mullins testified that while AWEC did not necessarily agree with
the cost-of-service study results the Company included in its initial filing in this case, the rate
spread included in the Proposed Settlement was nevertheless an acknowledgement that large
volume sales and transportation customers pay rates in excess of their class cost of service. Id. at
26-28.According to Mr.Mullins,though the Company's cost of service study would have justified
an even lower rate increase for transportation customers relative to other customer classes,AWEC
was willing to accept the Proposed Settlement "in the context of gradualism and in the spirit of
compromise."Id. at 28. Mr. Mullins believed the Proposed Settlement was in the best interest of
the Company's customers and should be approved by the Commission. Id. at 30.
ORDER NO. 36889 3

D. Micron Testimony
Micron witness James Leyko testified that the Proposed Settlement was in the range of
likely outcomes that would have resulted from a fully litigated rate case. Id. at 65. According to
Mr. Leyko, the Proposed Settlement reasonably resolved all revenue requirement, class cost of
service, and rate design issues.Id. According to Mr. Leyko, the Proposed Settlement provided the
Company the ability to fund necessary new investments while maintaining just and reasonable
rates for the Company's customers. Id. at 73. As such, Mr. Leyko recommended the Commission
approve the Proposed Settlement as filed. Id. at 65.
PUBLIC COMMENTS AND TESTIMONY
The Commission received 18 written public comments that opposed the proposed rate
increase, 15 of which were filed prior to the Proposed Settlement being filed. The commenters
were generally concerned with increasing rates for natural gas service at a time of financial
hardship and quickly rising cost of living. Numerous comments mentioned the fact that Idaho
Power Company also has a pending request to increase rates before the Commission, suggesting
multiple utility rate increases could take effect concurrently. Several comments questioned the
Company's representation that a rate increase is needed to meet new service demands. These
comments stated that the growth should pay for itself and/or that the basic economic principle of
economies of scale dictates that the cost per unit of production decreases as the volume of output
increases. Other commenters were troubled by the disproportionate proposed increase to
residential customers.
No customers testified at the November 13, 2025, customer hearing in Boise.
COMMISSION FINDINGS AND DECISION
The Company is a gas corporation and public utility, and the Commission has jurisdiction
over it and the issues in this case under Title 61 of the Idaho Code, and more specifically, Idaho
Code §§ 61-117, 61-129, 61-307, and 61-501-502. The Commission has the express statutory
authority to investigate rates, charges,rules,regulations,practices, and contracts of public utilities
and to determine whether they are just, reasonable, preferential or discriminatory, or in violation
of any provision of law, and may fix the same by Order. Idaho Code §§ 61-502-503.
In a general rate case, the Company's revenue requirement, and every component of it,
both rate base and expense,may be at issue. IDAPA 31.01.01.124.01. The Commission may grant,
ORDER NO. 36889 4

deny, or modify the revenue requirement requested and may find a revenue requirement different
from that proposed by any party is just, fair, and reasonable. Id.
The Company's retail rates and charges, both recurring and non-recurring, including those
of special contract customers, may be at issue, and every component of every existing and
proposed rate and charge may be at issue.IDAPA 31.01.01.124.02.The Commission may approve,
reject, or modify the rates and charges proposed and may find that rates and charges different from
those proposed by any party are just, fair, and reasonable.Id.
The Commission's process for considering settlement stipulations is set forth in its Rules
of Procedure 271-277, IDAPA 31.01.01.271-277. When a settlement is presented to the
Commission, it "will prescribe the procedures appropriate to the nature of the settlement to
consider the settlement." IDAPA 31.01.01.274. Here, the Commission convened both a technical
hearing and customer hearing on the Proposed Settlement. IDAPA 31.01.01.274. Proponents of a
proposed settlement must show "that the settlement is reasonable, in the public interest, or
otherwise in accordance with law or regulatory policy." IDAPA 31.01.01.275. Finally, the
Commission is not bound by settlement agreements. IDAPA 31.01.01.276. Instead, the
Commission "will independently review any settlement proposed to it to determine whether the
settlement is just, fair and reasonable, in the public interest, or otherwise in accordance with law
or regulatory policy."Id.
The Commission has reviewed the record,including the Application,Proposed Settlement,
testimony, and comments. The Parties built a detailed record through discovery, filings,
negotiations, and participation in hearings setting forth their respective justifications for signing
and supporting the Proposed Settlement. The Proposed Settlement incorporates input from
different stakeholders and customers. We appreciate and value the energy and investment the
Parties invested in preparing the Proposed Settlement in this case. The robust record has assisted
the Commission in understanding the important issues raised in this case. Based on our review of
the record, we find that the Proposed Settlement is fair, just, and reasonable and in the public
interest. We approve the Proposed Settlement with a minor modification.
The Proposed Settlement appropriately balances customers' desires for a smaller rate
increase relative to that sought by the Company with the Company's opportunity to recover the
costs it incurs to provide service to customers and to earn a fair rate of return. The Proposed
Settlement reduces the Company's requested revenue increase from $26.5 million to $13 million,
ORDER NO. 36889 5

a 10.4% increase. We believe this allows the Company to operate sustainably while protecting
customers from an unduly burdensome rate increase. The Proposed Settlement states that"Exhibit
4 will be effective upon the date of the order approving the [Proposed] Settlement." Proposed
Settlement at 4. However, in the interest of administrative ease, we direct that the new rates shall
take effect January 1, 2026. We approve all terms of the Proposed Settlement, other than the
directed effective date.
ORDER
IT IS HEREBY ORDERED that the Proposed Settlement is approved, effective January 1,
2026.
IT IS FURTHER ORDERED that the Company shall submit copies of its proposed tariffs,
with an effective date of January 1, 2026, as a compliance filing within 14 days of the service date
of this Order.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one(21) days of the service date of this Order regarding any matter
decided in this Order. Within seven (7) days after any person has petitioned for reconsideration,
any other person may cross-petition for reconsideration. See Idaho Code § 61-626.
N
ORDER NO. 36889 6

DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 30ffi day of
December 2025.
G
Gv�
EDWARD LODGE, PRE ENT
6;?OHN R. HAMMOND JR., COMMISSIONER
HARDI COMM SSIONER
ATTEST:
?4U' -4
Lau Calderon Robles
Interim Commission Secretary
I:\Legal\GAS\INTG2502_GRC\orders\INTG2502_fina1J I.docx
ORDER NO. 36889 7